Netflix, Relativity Deal Another Boost for Connected Devices

The recent buzz over IP-connected devices that can deliver streaming video to the television set continued Tuesday, as movie studio Relativity Media announced a deal to make a number of its upcoming theatrical releases available exclusively through Netflix's streaming service during the "pay TV" window instead of licensing them to traditional premium cable channels like HBO, Showtime or Starz.

The agreement will allow Netflix subscribers to watch the Relativity movies on their PC or on their TV via a connected device such as a Roku set-top or Blu-ray Disc player, as well as new broadband-enabled TVs. It follows recent announcements by video portal Hulu to launch a subscription TV service that will be available on Samsung connected TVs and Sony Playstation game consoles, and by ESPN to make its ESPN3 broadband network available through Microsoft Xbox game consoles.

The deal with Relativity doesn't apply to movies it is co-financing with other studios, but only titles that it fully owns, in which it is the sole financier and producer. It currently has 10 such films in the pipeline. They include "The Fighter," starring Christian Bale, Mark Wahlberg and Amy Adams and distributed by Paramount Pictures, and "Skyline," co-directed by the Brothers Strause and released by Rogue Pictures (a Relativity unit) and Universal Studios. Both films are scheduled for theatrical release later this year and to be available at Netflix in early 2011. Also slated for Netflix are Rogue Pictures' Nicolas Cage action/thriller "Season of the Witch" and "Movie 43," written and directed by Peter Farley, which are also both due to hit theaters this year.

While the Relatively deal doesn't turn the pay-TV landscape upside-down overnight, it does give Netflix some much-needed new titles for its streaming service, which has been hamstrung by a pay-TV window that can extend as long as nine years after theatrical release. And it could give studios more leverage as they negotiate deals with premium channels, as they can tout Netflix as a viable alternative pipeline.

"Consumer demand and interest in new platforms are evolving nearly as quickly as the technology," said Relativity president Michael Joe in a statement. "The growing number of Netflix subscribers streaming first run movies is very exciting and presents another viable option for us to maximize the long-term business behind our properties. We're delighted to partner with them on this incredible new opportunity, which has great promise for our industry-reshaping pay TV deals going forward."